For the past three months a couple of dangerous bills have been making their way through meetings on Capital Hill. The Protect Intellectual Property Act (PIPA) and Stop Online Piracy Act (SOPA) have become famous for their dangerously reckless approach to combating online piracy. Worse yet, this legislation will do almost nothing to actually stop piracy but could cripple or crush online distribution.

According to the MPAA and other supporters of this legislation, SOPA and PIPA target “rogue” web sites and foreign entities, but the liability created in these bills is huge for U.S. companies. YouTube, Dynamo, MUBI — almost any online film distributor could be strangled by this legislation. If SOPA/PIPA were to pass, any online service even suspected of hosting any amount of copyrighted content can be effectively shut down within a week.

Make no mistake. I hate piracy. I hate that deserving artists don’t get paid for their work. I hate that studios and distributors are forced to hopelessly accept and account for theft. I hate that sales of pirated goods — from DVDs to handbags — fund some of the largest criminal networks in the world, and support cottage industries of money laundering and human exploitation.

But the proposed SOPA legislation does far more than attempt to curtail piracy. SOPA and PIPA are completely reckless, sponsored by people with no clear understanding of online commerce, online media or the current generation of media businesses. As a result, these bills are like shotgun blasts aimed at a distant fly. While the scattershot hits everything around the target, that fly will continue to be a nuisance.

Worse yet, the most dangerous impact of this legislation is the ability for major studios to crush competitors. Rather than just creating a mechanism to control copyrighted content or penalize the hosts of illegal content, SOPA gives studios the ability to shut down entire sites and systems hosting any amount of copyrighted content on suspicion alone.

Ironically, for all of the big business and quasi-conservative support behind this legislation, it is a prime example of over-regulation aimed at limiting the free market. Executives at the major studios understand that SOPA/PIPA stifles their competition in the name of defending copyright.

As usual, studio support for legislation like this is largely a consequence of corporate fear and laziness. The television and film studios have spent much of the last decade cautiously sitting on the sidelines while the investors and innovators behind YouTube, Blip, MUBI, Livestream, Dynamo and hundreds of others took on disproportionate risk to build a sustainable online media market. Now that the markets are proven and the risk is manageable, the studios are backing legislation that would change the rules of commerce and cripple their competition.

An open, competitive market has always been the lifeblood of independent film and has always been terrifying to the studios. For 100 years studio executives have consistently been too scared about losing some of their dominance to explore new markets in innovative ways. With every new distribution option that independent filmmakers have launched, studio heads have pushed for legislation to either strangle or control it. And as much as I hate piracy, I also hate to see studio executives consistently hiring lobbyists to try and fix their problems after failing to innovate.

To support these efforts the MPAA, RIAA and major studios have all behaved like scared children for so many decades that it is no longer possible to take their Chicken Little cries seriously. We were told that the VHS was going to destroy the industry, but after they were forced by the market to embrace private rentals that market grew to become the largest and most reliable source of revenue. We heard the same story about audio tapes, DVDs, radio, cable television, pay-per-view — every technology that created a new way to reach the audience.

Piracy is a serious problem that requires serious solutions, but combatting technical innovation with aggressive legal attacks has never done anything but cripple the market. The best way to combat piracy is to make it easy and safe for people to pay for what they want. Piracy will always be a risk, but studies consistently show that a majority of people who pirate film and TV programs illegally will happily pay for them when those titles are available online and easy to pay for.

Independent filmmakers understand better than anyone that successful distribution means giving the audience what they want, whenever, wherever and however they want it. As an example of the real value of online distribution, at Dynamo we see video rentals succeed at price points 2-5x higher than Redbox DVD rentals. Yet this legislation could kill the online market before the studios even begin to take advantage of it.

Perhaps the worst of all this is that many supporters of this legislation likely have no idea just how dangerous this attack on online distribution is to their own future. Fearful studio executives are holding onto SOPA/PIPA like a hand grenade glued to their own fingers, but it’s the independent filmmakers who will suffer most when it blows up.

SF Film Society Blog

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